This is probably why they don't want any traders or anyone who knows how the market works employed by the SEC.
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The Securities and Exchange Commission, the top U.S. cop for insider trading, is examining whether two of its employees broke agency rules or tapped nonpublic information while making a high volume of trades.

SEC Inspector General David Kotz said his office has reviewed more than two years of brokerage records to see if the investments were approved, properly reported and held for required amounts of time. The probe described in Kotz's semi-annual report to Congress, posted yesterday on the SEC's Web site, also examines whether trades were based on confidential information from casework, co-workers or agency resources.

The report does not suggest investigators found evidence of misconduct. The inquiry was prompted by an allegation that an employee had a high volume of personal securities trading, raising suspicions that the employee may have violated the commission's rules, Kotz wrote. The inquiry later widened to include another person who may have engaged in similar behavior, he said.

Kotz has stepped up internal probes at the agency since he was appointed in December, questioning the regulator's policies, personnel decisions and handling of investigations. His report to Congress lists more than a dozen pending probes, from allegations of travel abuse to whether an SEC-issued BlackBerry was sold through eBay, the world's biggest Internet auctioneer. The report did not name anyone under investigation.

The SEC inspector general is responsible for conducting independent probes to detect waste, fraud and abuse.

The two employees sent numerous e-mails discussing stocks and securities transactions from SEC computers, the report said. Investigators are trying to determine whether they violated confidentiality requirements by discussing nonpublic information between themselves or with others outside the agency.

The inquiry will also examine whether the SEC has adequate procedures for monitoring its employees' investments and may make recommendations for improvements, according to the report.

Kotz, reached by phone, declined to comment, as did SEC spokesman Kevin Callahan. A March release by Kotz's office disclosed the inquiry into one employee's trades without specifying how the person might have broken agency rules or obtained secret information.